Abercrombie & Fitch Q3 tops estimates, fueled by strong growth at Hollister
Abercrombie & Fitch Co. reported a better-than-expected third quarter as surging sales for its Hollister brand offset continuing softening sales at its namesake division.
Net income totaled $113 million, or $2.36 per share, for the quarter ended Nov. 2, compared with $131.98 million, or $2.50 per share, a year earlier. Analysts had expected earnings of $2.16 per share.
Net sales rose 6.9% to $1.29 billion from $1.21 billion a year earlier, topping estimates of $1.28 billion. Comparable sales were up 3%.
By division, sales at Hollister surged 16% to $673.27 million, and comparable sales rose 15%. Sales at Abercrombie fell 2% to $617.35 million, and comparable sales plunged 7%.
“We achieved three years of consecutive quarterly sales growth, delivering record third quarter net sales, with 7% growth to last year,” stated CEO Fran Horowitz. “Hollister brands grew 16% on a strong finish to back-to-school and fall seasonal transition. Abercrombie brands made sequential progress in-line with our expectations, and we are tightly managing inventory as we aim for fourth quarter brand net sales to be approximately flat to last year’s record. We exceeded our expectations on earnings per share, while also returning $100 million to shareholders in the third quarter, our seventh consecutive quarter of share repurchases. “
The company narrowed its full-year outlook to the higher range of its expectations. It now expects 6% to 7% sales growth versus its previous range of 5% to 7% growth. Net income is expected to range from $10.20 to $10.50 per share compared to its previous forecast of $10 to $10.50.
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“We remain on track toward record net sales for fiscal 2025, on the foundation of consistent quarterly top-line growth, top-tier profitability, and healthy cash flow,” stated Horowitz. “Our results reinforce the strength of our operating model and give us confidence in our ability to drive sustainable, long-term shareholder value.”
